TaxTMI 
TaxTMI 
2026 (4) TMI 1245
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....") dated 26.06.2025 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the "Act") and relates to Assessment Year (A.Y.) 2021-22. 2. The effective grounds of appeal raised by the assessee are as under: "1. The Ld. CIT(A) has erred in law and on facts of the case in upholding disallowance made by Ld. AO u/s 43B of the Act pertaining to deduction claimed of gratuity actually paid of Rs. 11,84,163 to two employees on their discontinuation. 2. The Ld. CIT(A) and Ld. AO have erred in misinterpreting the effect of combined accounting entry passed for the final settlement of the two discontinuing employees in the ledger of Provision of Gratuity. 3. The Ld. CIT(A) and Ld. AO have passed the....
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....pective amounts of Rs. 6,39,490/- and Rs. 5,44,673/-. The appellant has also submitted that it has neither debited incorrect account nor misrepresented any accounting entry or facts. The appellant has further submitted that the above payment was also allowed u/s 43B. 6.3 The appellant has not provided any evidence either during the assessment proceeding nor during the appellate proceeding that the above payments were made on account of gratuity payments. As per the submission of the appellant itself the above payments were made on account of salary and not provident fund. Besides, it has been correctly held by the AO that the above payments, not being in the nature of provision fund payment, are not covered u/s 43B." 4. Before u....
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....lly paid by him :" 5. That in the impugned year also the assessee had claimed deduction only on account of gratuity actually paid and had filed documents evidencing the said fact also. Our attention was drawn evidences so filed as under: i. The audited balance sheet of the assessee containing notes to the financial statements for the impugned year mentioning the fact of the assessee providing for post-retirement benefits in the form of gratuity determined on the basis of an actuarial valuation and the policy of booking of leave encashment on payment basis in the books of accounts. Our attention was drawn to Paper Book page No.38 being notes to the financial statement for the year ended 31st March, 2021 Point (G) as under: ....
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....ote no.18 being employee benefit expenses debited to the P&L account reflecting the provision created for gratuity during the impugned year amounting to Rs. 21,27,379/-. Thereafter, our attention was drawn to the disclosures in the financial statement for the impugned year in accordance with revised AS-15 on employee benefits reflecting actual benefit reflecting actual benefit paid on account of gratuity during the year being Rs. 11,84,163/- at page no.45 of paper book as under: "22. Disclosure in accordance with Revised AS 15 on Employee Benefits: The Company operates a west benefit gratuity plan for its employees. Under the gratuity plan, every employee who has completed five years of service gets a gratuity on departure....
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....ankaj Keswani was also placed at paper book page nos. 9 & 10 reflecting the fact payment made to them on account of gratuity as noted above. 6. Ld.Counsel for the assessee therefore, contended that the assessee had sufficiently demonstrated the fact of having made payment of gratuity during the impugned year to two employees and, therefore, was entitled to claim deduction of the said amount of Rs. 11,84,854/- in terms of provision of Section 43B of the Act. 7. Ld. DR was unable to controvert any of the factual contention made by the Ld. Counsel for the assessee as above. Though, he vehemently supported the orders of the authorities below. 8. Having heard the rival contentions of both the parties, we find no merit in the order passe....
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.... fact of payment of gratuity amounting to Rs. 11,84,163/- with cogent and credible evidence. We hold the Ld. CIT(A) to have wrongly recorded the fact of assessee having not furnished any evidence in support of its claim of gratuity paid during the year u/s.43B of the Act. Therefore, we do not find any merit in the order passed by the Ld.CIT(A) denying the assessee's claim of gratuity paid u/s.43B of the Act amounting to Rs. 11,84,163/- for want of evidence of having paid the same. The AO is directed to be delete the disallowance of the same. Grounds of appeal No.1-3 raised by the assessee are allowed. 11. In the result, appeal filed by the assessee is allowed. This Order pronounced on 19/01/2026. ============= Document 1 Year En....